Almot Maqolo, Staff Writer 
BRIDGEFORT Capital (Bridgefort), formerly MedTech Holdings, has managed to reduce liabilities owed to foreign creditors, but hopes the central bank will speed up the clearance of legacy debts since delays are harming operations.
This comes as legacy debts have negatively weighed on companies’ balance sheets and continue to be a barrier to their ability to attract investors.
“During the year under review, payments were received from the Reserve Bank of Zimbabwe (RBZ) for legacy debts of ZAR3 million, which provided some much-needed relief for MedTech and its suppliers, leaving a balance of ZAR8,9 million,” the company said in a letter to shareholders.
Bridgefort produces and sells a variety of goods for the consumer and healthcare markets.
Business activities were significantly restricted by the difficult macroeconomic climate and frequent policy changes, according to the company.
“High-interest rates have certainly reduced the appetite for borrowings, but have also hindered the ability of those with ZWL debtors to hedge their devaluation risk and fund working capital. It appears that the high interest rates have resulted in less use of the local currency and therefore greater dollarisation.
“Despite the high interest rates, price increases have accelerated in 2023, compared to August to December 2022 suggesting that the cause of inflation is not ZWL borrowings,” the company said.
For the year ended December 31, 2022, the company’s sales volumes declined by 23 percent. Volume, a key indicator of demand, appreciated by 24 percent in the first six months of 2022 before falling by 48 percent in the second half of 2022.
“The significant drop in sales volumes in the second half was a direct result of the interest rate hike and companies unwinding their ZWL borrowing positions whilst reducing their staff remuneration percentages paid in local currency,” the company said.
Analysts say Zimbabwe’s interest rates are still too high after the central bank reduced the policy rate from 150 percent to 140 percent.
“This led to a drop in formal sector sales by our customers, which primarily trade in local currency due to the distortions in the official and parallel markets. MedTech also experienced some level of stock-outs due to the unaffordability of credit and a resultant reduction in working capital as borrowings were deliberately limited. Several customers were also on stop supply due to overdue payments at various stages. Sales to supermarkets and wholesalers continue to be subdued,” the company said.
On the other hand, the company’s total comprehensive loss for the year amounted to $1,44 billion, almost entirely made up of fair value losses due to the reduction in the real values of the class A and B shares on the Zimbabwe Stock Exchange.
It did not declare a dividend.
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